October 2, 2018

As Infection Point Nears, Blockchain Start-ups’ Narrative Vies for a Boost

The concept of “fake news” is not limited to the political arena these days. Thanks to an ever-expanding number of channels, it is quickly invading every facet of our lives.

The concept of “fake news” is not limited to the political arena these days. Thanks to an ever-expanding number of channels, it is quickly invading every facet of our lives. It’s often difficult to distinguish what’s real and what’s not. But fake news is not a 21st Century creation. Cavemen already used disinformation to spread confusion among rival clans and grab power, territory and/or attention. While the narrative of fake news has evolved through human history — from the cognitive to the agricultural to the scientific revolution — its impact to confusing us has remained constant.

For all its sophistication and mostly altruistic purpose, the tech sector is not immune to fake news. Blockchain, cryptocurrencies and Initial coin offerings (ICOs) have been getting a great deal of negative publicity lately. Many even predict a bursting bubble similar to the one the world saw during the dotcom crash of 2000. The roller-coaster ride of Bitcoin, the dismissal of more than 800 cryptocurrencies and a number of scams so far this year have added fuel to this doomsday scenario in which capital has been destroyed or simply vanished. Confusion seems to be taking over the attractive narrative that came along with a new technological, decentralized and peer-to-peer revolution.

Doomsday or bright day?

Beyond the headlines — fake or real — blockchain technology continues to gain adepts across a number of industries — even reluctant ones such as banking. Cryptocurrencies have also passed the highly speculative phase as some type of consolidation looms on the horizon. And ICOs are evolving from a crowdfunding effort to a large scale investment drive. Blockchain-based messaging app Telegram showed this new trend when it cancelled its ICO public round after it managed to raise USD 1.7 billion from private investors during the pre-sale round. Some experts in the field are even going as far as predicting that the worlds of ICOs and traditional IPO funding will merge into a new model of start-up financing with better checks and balances to protect both companies and investors.

Rather than a doomsday scenario, blockchain and the revolution of possibilities it has unleashed has reached the inflection point. According to a recent McKinsey study, 70% of the blockchain’s short-term value (2–5 years) will derive from reducing costs and driving operational efficiencies. What industry would not be onboard for such a value proposition?

The ICO market may be slowing down but it is by no means heading to a doomsday scenario either. As long as banks don’t provide funding for blockchain-based start-ups, ICOs remain a legit, innovative venue to raise money and get ideas off the ground. The challenge remains telling a good story, building a following and focusing on developing a killer product or a refined service. Most blockchain start-ups fail not so much because of their tokenomics — i.e., usage, usability and value — but because of their weak, confusing and highly tech-driven narrative.

Blockchain startups of the world: Get your act together!

Nothing is more effective than a well-told story. Without the key elements, nobody will care or engage with you. The vast majority of start-ups in the blockchain space are too small or inexperienced to prioritize their communications needs. Many even trivialize the comms part believing that solving the world problems through technology will immediately translate into overnight adoption. However, few succeed in translating a complex technological paper into plain, single language that resonates with the audience and turns them on. This is where the expertise of communications consultants and PR marketing firm come in handy not only to develop but most important to position a story.

Getting the act together starts with a solid, well-written whitepaper that identifies the problem or challenge, shows a clear methodology to solve it, outlines an achievable timeline, and provides a realistic cost-benefit ratio to those pouring their money into the venture. The graveyard of blockchain and cryptos is full of whitepapers — and some amazing ideas — that did not invest the time in putting a narrative that could tell the story and stand by it.

In the ICOs universe, the communication part does not end with a published whitepaper (otherwise known as pre-ICO phase). It is just the beginning of a journey that will take the start-up through the most strenuous phases: The actual ICO and the post-ICO. As a rule of thumb, communications should be a constant endeavor — not a sporadic exercise — that connects symbiotically and rallies the company and the audience behind a common objective.

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